Buy-to-Let Business Plans

From 30th September 2017, landlords with 4 (or more) distinct mortgaged buy-to-let properties – this figure also includes any applications in progress – will be treated as ‘portfolio landlords’ and required to meet new mortgage lending requirements.

The change means that, going forwards, lenders may now be forced to review a landlord’s entire portfolio when deciding what mortgage deal they can offer on their next property.

As such, the Prudential Regulatory Authority (PRA) suggests buy-to-let lenders now request the following documentation from portfolio landlords:

Business Plan

Cash Flow Forecast Spreadsheet

Income and Expenditure Spreadsheet

Property Portfolio Spreadsheet

Bank Statements (3 Months)

SA302’s and Tax Overview’s from HMRC

Tenancy Agreements

Buy-to-Let Business Plan Service

If you have a buy-to-let property portfolio and need assistance in preparing documentation under these changes for a lending application, then our specialist Buy-to-let Business Plan Service includes the following support:

Business Plan

We can write a business plan that will help inform the buy-to-let lender of your competency, experience, current approach and future plans with regards to expanding your portfolio. Now an integral part of a lending application, your buy-to-let business plan will include the following key categories:

Executive Summary

This is a summary background of the landlords(s) and will include:

summary of relevant experience

summary of current property portfolio

career background

property background

Current Investment Strategy

This section will include details on:

town/city where properties are located

property types (e.g. HMO, single residential leasehold flats)

tenant profile

management of properties (e.g. self-managed, managing agent)

rent-to-costs financial model utilised.

Future Strategy

This section will include specific details on:

proposed acquisitions and sales

development/ refurbishment projects (including source of capital for funding works on new acquisitions and the timescale before property is available for letting),

contingency plans to cover property void periods

any restructuring plans for your business

Funding Requirements

This section will include confirmation of the total aggregate borrowing required over the next 12 months:

Cashflow Forecast Spreadsheet

The cash flow forecast will be used to test the financial viability of extending your portfolio. Therefore we will prepare a cashflow forecast that estimates what the cash into and cash out of the bank account will be over the next 12 months.

Income and Expenditure Spreadsheet

Income and Expenditure are to test your current financial viability and identify any risks in your current budget We will also prepare an Income and Expenditure spreadsheet which details your current budget, and provides an overview of all your income streams (wages, rent etc) as well as any expenditure such as day-to-day costs and credit agreements.

We can also prepare a Property Portfolio Spreadsheet as well as any other additional detail that will support your proposal.

*Note: at the time of writing, exact criteria requirements from lenders are unknown – some lenders may require some, or all, of the PRA’s recommended documentation. Therefore, we urge you to check what specific documentation is needed for your lending provider*

Contact Us

If you have a buy-to-let property portfolio and need assistance in preparing documentation for a lending application under these changes, then please contact us to discuss our specialist Buy-to-Let Business Plan Service.